Dipartimento di Politiche Pubbliche e Scelte Collettive – POLIS Department of Public Policy and Public Choice – POLIS

Working paper n. 149

September 2009

Sharing the pie: the Lutheran is neither opportunistic nor generous

Matteo Migheli

UNIVERSITA’ DEL PIEMONTE ORIENTALE “Amedeo Avogadro” ALESSANDRIA

Periodico mensile on-line "POLIS Working Papers" - Iscrizione n.591 del 12/05/2006 - Tribunale di Alessandria

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Sharing the Pie: the Lutheran is neither Opportunistic nor

Generous

Matteo Migheli*

Abstract

This paper studies how individual religiosity affects people’s behaviour. In particular here I study the behaviour of the second players in a standard trust game. They have the possibility of sharing some resources between themselves and their game mates. It results that more religious people tend to choose an even allocation of these resources, whilst the less religious participants are either opportunistic or generous.

Keywords: religiosity, distribution of resources, inequity aversion

JEL Codes: C93, D30, Z12

University of Eastern Piedmont, Department of Public Policy and Collective Choice; Via Cavour, 84 15121 Alessandria (AL) – Italy. Tel: +39 0131 287807. Email: matteo.migheli@sp.unipmn.it

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1. Introduction Religions teach particular rules and values to theirs members. One of the most important

precepts of Christ’s teaching is charity: the good Christian cares about the others’ situation and is

concerned about sharing his/her resources with the poor. In the Gospel this idea is generally

equalitarian: it is presented as an equal division of the resources among the members of a group1

(Wallis, 2005). I aim at checking whether religious people apply this moral rule in economic

decisions.

Religion is found to affect relevant economic decisions of the individuals. An important

consequence of this at a macro level is that more religious countries attain higher growth (Barro and

McClearly, 2003). At the micro level Iannaccone (1994) stresses that affiliation to a certain

confession rather than to another is likely to drive people towards higher saving rates and higher

wages. Iannaccone (1995) provides also evidence of how religious beliefs are important in

household production. Keister (2003) relates the accumulation of financial assets in early adulthood

to religious affiliation and participation. However, so far little attention has been paid by the

economists or religion to the possible effects of religiosity on individual pro-social attitudes.

According to Holm and Danielson (2005) the decisions of the players in experimental games

are driven also by unconditional distribution preferences: donations in a dictator game and shares

returned in a trust game are significantly correlated. The existence of a moral norm (equal sharing

in the case of Christians) followed by the players could be an explanation. Indeed Anderson and

Mellor (2009) find that religiosity may sustain cooperation in a public good game. Using a trust

game (see Berg et al., 1995) I find that more religious (namely Lutherans2) people tend to split the

pie equally, rather than behaving in an opportunistic or other-rewarding way.

1 Luke, 3:11; Acts, 4:32. See also Harrington et al. (2005). 2 Although I did not ask of which religious denomination the responder was member, I assume that the large majority of the participants to the experiment were lutheran, mirroring the Norwegian population.

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2. Methodology In this paper I use a basic trust game. This involves couples of people, playing non

simultaneously. The first member of the couple (the first to play) is endowed with some money:

he/she has to decide how much to pass to the game mate (who has no endowment). The

experimenter triples this amount and gives it to the second player, who must decide how much of

the received sum he/she wishes to pass back to the first player. This decision ends the game. Both

the players have complete information about the rules of the game, and full anonymity is ensured.

An ultimatum or a dictator game (for designs see Camerer, 2003) could also be employed, but a

trust game is more suitable for this type of study. In fact, the second mover may receive some

money from the endowment of the partner, and this may stimulate some sentiments3 to play a role,

thus strengthening the impulse to pass back some positive sum. To look for the presence of this

positive stimulus is useful for my inquiry: if religiosity makes the player’s choice to converge

towards even sharing rather than to one of the other two possible outcomes (especially the generous

one; see below), this would mean that among religious people the sense of equal splitting prevails..

It might also be possible that the presence of the stimulus induces the more religious people to

prefer the intermediate outcome to the others. In other words I am hypothesizing that equal sharing

is the way followed by religious people to “reciprocate”. Also in this case, however, if the choice of

equal redistribution prevails on the others within religious people, this would clearly highlight an

influence of religion on people’s decision process.

The existent literature typically measures the individual religious attitude through personal

beliefs and/or participation to the services. I adopt a stricter measure of individual religiosity: the

time that a person spends weekly within religious voluntary associations. Participation to these

groups requires both a religious belief and a positive intention to devote some spare time within an

association, among whose goals the propagation of religious values plays a central role. Hence these

people show a strong religious attitude, which I assume to be stronger and stronger as the time

devoted to the association increases.

A total of 207 undergraduate students from the University of Oslo4 participated in the game:

105 were first movers and 102 were second movers5. I classify the choices of the second movers

into three strategies: opportunistic (keeping a payoff higher than the counterpart’s), equalitarian

(transferring an amount of money such that both players end with the same payoff), or generous 3 Among them we can mention anger, reciprocity or gratefulness, as highlighted by Fehr and Schmidt (1999), Molm et al. (2000), Camerer (2003) and Bouckaert and Dhaene (2004). 4 All of them were from the School of Economics, but none had already taken any course in Game Theory or related topics. 5 The difference between the number of participants in the two groups reflects the fact that some people in both groups had to be excluded because they violated the requirement of anonymity in filling their forms.

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(transferring an amount of money so that the counterpart ends with a payoff higher than the second

mover)6. As a consequence here I consider only those second movers who got more than ¼ of the

initial endowment (2,300 NOK) from the first mover7. Since the decision of the latter is tripled,

those who receive more than ¼ of the initial endowment can choose one out of the three possible

described outcomes. The other second movers have not access to the full set of choices and

therefore are not taken into account8. Indeed the considered sub-sample is such that, after the first

stage of the game and before the second is played, the first mover has a preliminary payoff that is

lower than the second mover’s. After playing the game, the participants filled in an anonymous

questionnaire aimed at collecting socio-demographic data and participation to several different

voluntary associations and social networks. At the end of the game two couples were randomly

drawn and paid according to their choices. Notice that the high notional endowment ensures a high

expected value9, whose magnitude constitutes a good incentive to play seriously.

Three dummy variables are constructed, one for each of the three possible outcomes; this

allows for estimating the probability of belonging to one of the three groups by the means of a

probit analysis. This methodology to analyze the outcomes of a trust game has also been employed

in Migheli (2007).

6 A long discussion about this “generous” strategy would be possible. The existing experimental literature does not provide a definitive explanation for this behaviour. Apparently more than just generosity justifies it: the original designers of the game talk about reciprocity, others about gratefulness, social paradigms, etc. However here it is neither my intention, nor the aim of the paper, to discuss this point. The etiquette that I attach to this behaviour is purely motivated by practical reasons, and the semantic choice is aimed at driving the attention of the reader intuitively towards the outcome of the choice. I do not intend to participate, by this specific paper, to the discussion about the motivation(s) behind this kind of choice. 7 A total of 88 subjects are therefore retained. 8 This can be easily shown. Let S be the initial endowment of the first mover and α the share passed to the second mover. Since the experimenter triples this amount of money, the second mover’s endowment is equal to 3α. If α>¼S, then at this stage of the game the first movers keeps less than ¾S, whilst his/her counterpart is endowed with more than this. 9 Equivalent to an hourly income ranging from a minimum of 184 NOK and a maximum of 552 NOK.

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3. Results The graphs depict the frequencies of the amounts passed back to the first player. It is possible

to notice that people who are member of religious associations display a behaviour that appears to

be more “regular” than non-members’ (Figures 4 and 5). In particular the sums passed back by the

players who devote some spare time to religious associations are chosen so to split the pie evenly. I

will show this in the following econometric analysis. Here it is sufficient to notice that the modal

choice for the full sample and for the two gender-based sub-samples is represented by 3,450NOK;

moreover, while some males who received 6,900NOK passed back the entire amount (this means

that they did not keep any money for themselves), no female player chose it.

Table 1 reports the results of the probit regressions, one for each possible outcome. As usually

found in the literature (Camerer, 2003), the received amount affects the decision of the second

mover positively: the larger it is, the higher the probability of not behaving opportunistically. The

time spent within voluntary religious associations is significantly linked with all the three

behaviours, but the association is negative for the opportunistic and the generous outcomes, whilst it

is positive for the equalitarian. This supports the initial hypothesis: the more people are endowed

with religious capital10 and the more practice Christian values the more they are prone to share the

resources equally, rather than to choose any other allocation. The analysis of the marginal effects

suggests that the aversion to an opportunistic behaviour is more significant than to a generous

behaviour, when the whole sample is considered (table 1); this finding no longer holds when each

of the two non equalitarian outcomes is compared to the equalitarian only (table 2), but in this case

the difference between the marginal effects is not significant (so the aversion against either non

equalitarian behaviour may be the same). Moreover we can notice that men tend more to be

generous rather than opportunistic or equalitarian with respect to women, while working students

are rather opportunistic instead of generous or equalitarian, perhaps because they have a utility

function of money shifted upwards.

Table 2 shows the results of probit regressions when only a couple of outcomes (i.e. either

generous and equalitarian or opportunistic and equalitarian) are analyzed. The previous conclusion

gets confirmed.

10 For the strong connection between religion and social capital see Smidt (2003).

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4. Conclusions This paper shows that, when allocating resources, the participants to the experiment who

spend more time in voluntary religious associations are more prone than the average of the

population to opt for an even distribution rather than for an opportunistic or a generous one.

People who spend time in voluntary religious organizations put in practice and very likely

teach the fundamental rules of their religion (in Norway, namely Lutheran Christianity). Among

these the even sharing of resources plays a crucial role, and this paper shows that the more a person

participates in a religious based network, the more probably he/she will apply this social norm. This

result is relevant as also when they are required to allocate resources outside the environment of the

association, or, in any case, outside a religious environment they may exhibit the same allocation

preference. As a conclusion I would highlight that Christian values can affect the behaviour of

people charged of managing resources of programmes with (above all) humanitarian or social aims.

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References

- Anderson, Lisa R. and Jennifer M. Mellor. 2009. “Religion and Cooperation in a Public Goods

Experiment” Economics Letters, 105: 58 – 60.

- Barro, Robert and Rachel M. McClearly. 2003. “Religion and Economic Growth across

Countries” American Sociological Review, 68(5): pp. 760 – 781.

- Berg, Joyce E., John Dickhaut and Kevin McCabe. 1995. “Trust, Reciprocity and Social

History”. Games and Economic Behavior 10: 122 – 142.

- Bouckaert, Jan and Geert Dhaene. 2004. “Inter-Ethnic Trust and Reciprocity: Results of an

Experiment with Small Businessmen” European Journal of Political Economy November,

20(4): pp. 869 – 886.

- Camerer, Colin. 2003. Behavioral Game Theory. Experiments in Strategic Interaction.

Princeton: Princeton University Press.

- Fehr, Ernst and Klaus M. Schmidt. 1999. “A Theory of Fairness, Competition, and

Cooperation” The Quarterly Journal of Economics, 114(3): 817 – 868.

- Harrington, Daniel J. S.J. and James F. Keenan S.J. 2005. Jesus and Virtues Ethics: Building

Bridges between New Testament Studies and Moral Theology, Maryland: Rowman and

Litterfield.

- Holm, Håkan J. and Anders Danielson. 2005. “Tropic Trust versus Nordic Trust: Experimental

Evidence form Tanzania and Sweden” The Economic Journal, 115(503): 505 – 532.

- Iannaccone, Laurence. 1994. “Progress in the Economics of Religion” Journal of Institutional

and Theoretical Economics, 150(4): pp. 737 – 744.

- Iannaccone, Laurence. 1995. “Household Production, Human Capital and the Economics of

Religion” in The New Economics of Human Behaviour, edited by Mariano Tommasi and

Kathryn Ierulli, Cambridge: Cambridge University Press, pp. 172 – 187.

- Keister, Lisa A. 2003. “Religion and Wealth: the Role of Religious Affiliation and Participation

in Early Adult Asset Accumulation” Social Forces, 82(1): 175 – 207.

- Migheli, Matteo. 2007. “Trust, Gender and Social Capital: Experimental Evidence form Three

Western European Countries”, University of Torino (mimeo).

- Molm, Linda; Nobuyuki Takahashi and Gretchen Peterson. 2000. “Risk and Trust in Social

Exchange: an Experimental Test of a Classical Proposition” The American Journal of

Sociology, 105(5): 1396 – 1427.

- Smidt, Corwin. 2003. Religion as Social Capital, Waco: Baylor University Press.

- Wallis, James. 2005. God’s Politics, San Francisco: Harper Collins Publishers.

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Figure 1. Amounts passed back to the first player (whole sample)

Figure 2. Amounts passed back to the first player (male players)

0.0

5.1

.15

.2D

ensi

ty

0 2000 4000 6000 8000Passed amount (NOK)

0.0

5.1

.15

.2.2

5D

ensi

ty

0 2000 4000 6000 8000Passed amount (NOK)

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Figure 3. Amounts passed back to the first player (female players)

Figure 4. Amounts passed back to the first player (subsample of those participantswho are not members of religious associations)

Figure 5. Amounts passed back to the first player (subsample of those participantswho are members of religious associations)

0.0

5.1

.15

.2.2

5D

ensi

ty

0 1000 2000 3000 4000Passed amount (NOK)

0.0

5.1

.15

.2.2

5D

ensi

ty

0 2000 4000 6000 8000Passed amount (NOK)

0.0

5.1

.15

.2.2

5D

ensi

ty

0 1000 2000 3000 4000Passed amount (NOK)

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Table 1. Probit regressions for the three different outcomesDependent variable:

Coefficient Marginal effect Coefficient Marginal effect Coefficient Marginal effectReceived amount (for each 10€) 0.055 -0.002 0.056 0.002 -0.003 -0.0005

(0.013)*** (4*10-4)*** (0.012)*** (5*10-4)*** (0.011) (0.002)Male 0.462 0.164 -0.753 -0.283 0.873 0.150

(0.366) (0.136) (0.426)* (0.149)* (0.406)** (0.078)**Time spent within: religious associations -0.385 -0.134 0.595 0.233 -0.460 -0.068

(0.209)* (0.071)* (0.194)*** (0.076)*** (0.216)** (0.032)** sports associations -0.043 -0.015 0.014 0.006 0.039 0.006

(0.068) (0.024) (0.046) (0.018) (0.047) (0.008) cultural associations 0.124 0.043 -0.203 -0.079 0.158 0.023

(0.088) (0.029) (0.044)** (0.037)** (0.084)* (0.014)* political associations -0.222 -0.077 0.153 0.060 -0.084 -0.012

(0.137)* (0.045)* (0.115) (0.046) (0.077) (0.012)Time spent in communications through telephone 0.010 0.004 -0.138 -0.054 0.223 0.033

(0.117) (0.041) (0.100) (0.039) (0.111)** (0.018)** text messages 0.005 0.002 -0.004 -0.001 -0.003 -0.0004

(0.004) (0.001) (0.004) (0.002) (0.004) (0.0005) the Internet -0.038 -0.013 0.123 0.048 -0.185 -0.027

(0.041) (0.014) (0.037)*** (0.014)*** (0.064)*** (0.001)***Having a job 1.025 0.311 0.243 0.094 -1.587 -0.344

(0.414)** (0.100)*** (0.353) (0.135) (0.391)*** (0.103)***Ethnicity1 0.071 0.025 -0.264 -0.103 0.355 0.052

(0.205) (0.071) (0.201) (0.079) (0.263) (0.040)Constant 0.896 -2.160 -0.629

(0.716) (0.750)*** (1.014)Pr(y = 1) 0.301 0.423 0.0791 Ethnicity takes values 0, 1, 2, 3 according to the answer of the player to the following question: “Do you feel: 0) from my own region; 1) Norwegian; 2) European; 3) nationality is not important at all. Number of observations: 85 85 85Pseudo-R2 0.374 0.361 0.302

Opportunistic behaviour Equalitarian behaviour Generous behaviour

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Table 2. Probit regression for adopting a generous or an opportunistic behaviour vs. an equalitarian behaviour

Coefficient Marginal effect Coefficient Marginal effectReceived amount (for each 10€) -0.006 -0.002 -0.003 -7*10-4

(0.001)*** (5*10-4)*** (0.001)* (3*10-4)*Male 0.805 0.243 1.773 0.431

(0.469)* (0.113)** (0.646)*** (0.159)***Time spent within: religious associations -0.421 -0.159 -0.953 -0.230

(0.169)*** (0.064)*** (0.312)*** (0.081)*** sports associations -0.032 -0.012 0.040 0.008

(0.067) (0.025) (0.057) (0.012) cultural associations 0.190 0.072 0.306 0.065

(0.087)** (0.034)** (0.191) (0.043) political associations -0.296 -0.112 -0.146 -0.031

(0.139)** (0.053)** (0.135) (0.028)Time spent in communications through telephone 0.080 0.030 0.290 0.062

(0.114) (0.044) (0.198) (0.042) text messages 0.006 0.002 0.005 0.001

(0.003)* (0.001)* (0.010) (0.002) the Internet -0.072 -0.027 -0.288 -0.061

(0.039)* (0.015)* (0.100)*** (0.022)***Having a job 0.386 0.152 -1.661 -0.391

(0.486) (0.188) (0.491)*** (0.125)***Ethnicity1 0.268 0.101 0.407 0.087

(0.236) (0.086) (0.364) (0.081)Constant 1.151 0.567

(0.783) (1.246)Pr(y = 1) 0.409 0.123

Number of observations: 73 52Pseudo-R2 0.438 0.434

Opportunistic behaviour Generous behaviour

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APPENDIX I: EXPERIMENTAL INSTRUCTIONS There are two groups of students: A and B (both from the University of...). Each Student A is anonymously

and randomly matched to another Student B.

Step 1

Student A receives the notional sum of 200€ and decides how to share this amount between himself and

Student B.

Step 2 The amount Student A passed to Student B is tripled; in other words, for each euro that Student A

passes, Student B receives 3€. Student B knows that the received sum is determined in this way.

Step 3 Student B decides how to share the received sum between himself and Student A.

Step 4 A couple of students will be randomly drawn and paid according to their decisions. These two students

will be separately paid to avoid them to meet.

Warning:

• All the decisions remain totally anonymous.

• These instructions are perfectly identical for all the components of both groups A and B.

You are a student of group… (exactly as all the other students in this classroom).

• Please, write in part A of the attached form how much you want to pass to Student B.

• Then answer the attached questionnaire.

• Take the numbered paper. If your number is drawn, you have to show it in order to be paid.

• Handle back the form and the questionnaire.

The drawn number will be announced during one of the following classes and published on the website.

THANK YOU FOR YOUR COOPERATION!

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Part A Student A:

You divide 200€ between yourself and a Student B. Write down the

sum (between 0 e 200€) that you want to pass to Student B:

______________€

Part B

Student B:

You receive three times the amount Student A gave you. Thus, you receive

______________€

You divide this amount between yourself and Student A.

Write down the sum you pass back to Student A:

______________€

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APPENDIX II: QUESTIONNAIRE

Please answer the following questions: 1. Below there is a list of different voluntary associations. Indicate how much time on average

(hours and minutes) you spend weekly in each of them. Indicate also the number of associations of the same type you are a member. Moreover explicitly indicate whether you are not a member of some of the listed types.

Associations Time Number Not a member

Sports associations (including gyms) h min.

Religious associations h min

Cultural associations (music, theatre, arts, ...) h min

Own Faculty students’ associations (i.e..) h min

Other students’ associations h min

Specify

Environmental associations (WWF, Greenpeace, ...)

h min

Associations for animals’ rights (es.) h min

Political parties/associations h min

Youth clubs (Scouts, ...) h min

Social aimed associations (i.e. Red Cross, …)

Other associations h min

Specify

2. How much time on average do you spend weekly in phone talks with friends (including Skype)? ______ h ______ min

3. How many short text messages do you send from your mobile on average per week? _ _____ 4. How much time (hours and minutes) on average do you spend weekly in active Internet

communications (reading and writing emails, chatting, ...)? _ ____ h ______ min

5. How much free time on average do you spend weekly with your friends? ______ h ______ min

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6. How many brothers do you have? ___ __ How many sisters do you have? _ __

7. Have you a student job currently? Yes No 8. Do you live in the city of the university? (domicile) Yes No

If no, during the week do you live … (in a student room/apartment)? Yes No

9. Which country and province are you from? Country: _ _________________________ Region:_________________________

10. Are you the owner of the apartment you live in? Yes No If no, please indicate how many crowns per month you pay for the rent of your room/apartment _____________

11. To which of the following group do you feel to belong firstly own region Norwegian Scandinavian European Other (specify):_______

12. Gender: M F

Thank you very much for your cooperation!

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